Overtime bill pits needs of high-tech employers vs. workers

WASHINGTON — High-tech workers across the country could see smaller paychecks under an industry-led campaign to revise labor laws to further limit overtime benefits.

Some of the multinational firms behind the effort, such as IBM and Intel, say the changes are necessary to keep jobs from going overseas, where technology workers are paid a fraction of U.S. wages.

Computer workers, however, see it as an effort to squeeze more work out of employees for less pay in an industry that's notorious for killer hours and all-nighters.

U.S. Sen. Kay Hagan, a Democrat from North Carolina, introduced the bill last fall to expand the kinds of technology workers who aren't automatically entitled to overtime. Her measure widens the pool to those whose duties include securing, configuring, integrating and debugging computer systems, she said.

The potential effect is significant. More than 3 million people work in computer-related occupations, including 408,000 in California, 250,000 in Texas, 140,000 in Florida, 105,000 in Washington state and 68,000 in Missouri, according to the Bureau of Labor Statistics. Employees and employers disagree about how many of these workers are entitled to overtime.

It's unclear how many people would be affected. But many already aren't entitled to automatic overtime pay, which is defined as time and a half after 40 hours of work in a workweek. Employers can pay for overtime if they choose even if federal law doesn't require it.

U.S. labor law says computer employees who are paid fixed salaries of at least $455 a week ($23,660 per year) or who get hourly wages of at least $27.63 and who perform job duties such as systems analysis and programming aren't entitled to automatic overtime pay.

Employers seek the changes as class-action lawsuits by employees seeking back pay for overtime and missed breaks have risen dramatically over the last decade.

In November, California-based Oracle Corp. agreed to pay $35 million to settle a class-action suit brought by a group of California employees who said they were wrongly denied overtime pay. IBM agreed to pay $65 million in 2006 to settle claims that it had denied overtime to 32,000 computer technicians.

In 2003, Bank of America, based in Charlotte, N.C., reached a $4.1-million settlement with employees in Washington state who alleged they were misclassified as managers so their employers could avoid paying overtime.

Computer giants such as IBM have invested thousands of dollars lobbying politicians to revise labor law in a way that would allow them to give their computer employees more flexible work schedules, but also to stop paying them overtime.

Certain highly skilled professionals, such as doctors and lawyers, don't qualify for protections such as overtime, based on their income, how they're paid and the work they do.

According to a Congressional Research Service report, the most common justification for excluding these jobs from labor protections is that more highly skilled professional employees are better able to bargain individually over wages, hours and working conditions. They also tend to work on more flexible schedules and in jobs that require evening or weekend work, times that would be difficult for employers to monitor.

Computer professionals were added to this list in 1990, but supporters of revising the law say the law fails to account for the substantial technological changes over the past 20 years. They cite the lawsuits as an example of the need for clarification.

There's no reference to the Internet in the existing law, said Eric Weaver, the director of education and workforce policy at Intel Corp. He said workers sought greater flexibility in when and where they did their work, but the current law made it difficult to grant employee requests to move their schedules around to fit their personal and professional lives.

"What we have now is the law is unclear, so multinational employers like Intel can take jobs and put them in places where the law is less ambiguous," he said. "The intent is not to take overtime from employees entitled to it."